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Research Report Report Number 747, June 2017

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Research Report Report Number 747, June 2017 Research Report Report Number 747, June 2017 Utah’s Coal Counties Part III: Coal Communities Brent Jensen, Chair The mission of Utah Foundation is to promote a thriving Elizabeth Hitch, Vice Chair economy, a well-prepared workforce, and a high quality Peter Mann, Treasurer of life for Utahns by performing thorough, well-supported Stephen J. Hershey Kroes, President research that helps policymakers, business and community Shawn Teigen, Research Director leaders, and citizens better understand complex issues 150 South State Street, Suite 444, Salt Lake City, UT 84111 and providing practical, well-reasoned recommendations 801-355-1400 • utahfoundation.org for policy change. Utah’s Coal Counties , Part III Research Report 1 Utah’s Coal Counties Part III: Coal Communities Governor Gary Herbert is looking to create 25,000 new jobs in Utah’s 25 non-Wasatch Front counties by 2020. There is certainly a broad and deep effort toward this end. The Utah Legislature has passed bills to bolster economic development, and there are numerous state agencies involved in the effort. Several public-private partnerships are working on rural job creation, as are non-profit and for-profit entities. The federal government is also involved. Utah’s more-rural counties themselves are leading this effort. One of the reasons for the need to think about job creation in rural areas is coal. The nature of electricity generation and coal- mining has changed over the past several Part I – Coal Energy, Production, and the Future decades, and continues to change. Mining has Part II – Coal Mines, Jobs, and Economic Benefit become more efficient, which has required fewer Part III – Coal Communities employees. In addition, the shift toward electricity generation that requires less employment has affected communities across the nation. As a result, many communities are shrinking. That is not necessarily the case in Utah coal communities, but they are not seeing the growth that other areas are experiencing. Since 1980, Utah’s coal communities have averaged about half the percentage of the state’s growth. While Kane, Sanpete, Sevier, and Uintah counties have grown robustly in the past 25 years, the populations in Carbon, Emery and Millard counties have remained stagnant. With an uncertain future for coal-fueled electricity generation and coal mining in Utah, some communities are looking toward economic development options. The key to this development is diversification: • Diversification of the uses of coal, such as making carbon fiber and producing a liquid-coal alternative to oil. • Diversification of electricity generation, which includes the sequestration of greenhouse gas emissions from coal-fueled operations to comply with current and future regulations, as well as the shift toward non-coal electricity generation sources. Unemployment Rates in Utah and Coal Counties • Diversification of local economies in ways County that are fitting to each of the individual Carbon 5.2% communities, such as agriculture, tech jobs, Emery 5.4% manufacturing, and tourism. Kane 3.2% Millard 3.3% In light of this diversification, communities will Sanpete 3.7% Sevier 3.9% need to utilize their strengths, and turn some Uintah 6.6% of their weaknesses to their advantage, such as County Average 4.5% marketing their higher unemployment rates as a State of Utah 3.1% potential for job creation. This report was written by Utah Foundation Research Director Shawn Teigen with assistance from Research Intern Thulasi Seshan. Shawn can be reached for comment at 801-355-1400, extension 3, or by email at [email protected]. Thanks to those who provided insight and reviewed Part III of this report, including those listed at the end of this report. Special thanks to Intermountain Power Agency for providing financial support to this project. Utah Foundation • utahfoundation.org Utah’s Coal Counties , Part III Research Report 2 Coal mining and coal-fueled electricity generation Figure 1: Utah’s Coal Mines and Coal-Fueled Power is a major source of job creation and tax revenue Plants, by County for many rural Utah counties. Utah Foundation released a project in three parts to address Utah’s coal County Operating Coal Mines Coal-Fueled Power Plants Carbon Dugout Canyon, Skyline #3* Sunnyside economy. Part I looked at coal-mine production and Emery Castle Valley #3 and #4, Hunter, Huntington Lila (Horse Canyon), Skyline #3* the changing nature of electricity generation. Part II examined the outlook for coal-related employment Kane Coal Hollow (with Burton #1) Millard Intermountain in the coming years. This third part of the Utah Sanpete ** Foundation coal project takes a closer look at coal Sevier Sufco communities. It details the economic advantages Uintah Bonanza and disadvantages coal brings to these communities *Carbon and Emery counties. in an era where reliance on coal is potentially ** Provides employees for Sufco mine. decreasing. It also examines existing and potential resources these communities could use to survive and even thrive. UTAH’S COAL COUNTIES Part III of the Utah Foundation coal project focuses on the seven communities that are most dependent on coal. Coal mining currently takes place in four Utah counties: Carbon, Emery, Kane, and Sevier.1 Two mines account for 72% of Utah’s production.2 The highest producing mine is Sufco in Sevier County, which provides considerable direct and indirect employment in Sevier and neighboring Sanpete County. The Skyline mine, bordering Emery and Carbon counties, is the second-most productive in Utah. Carbon, Emery and Kane counties house the remaining active mines. Figure 2: Utah’s Currently Operating Coal Mines and Coal-Fueled Power Plants There are five coal-fueled power plants in Utah. The largest plant, Intermountain Power Project in Millard County, sells most of its power to six municipalities in southern California. The next largest plants are the Hunter plant and the Huntington plant in Emery County, owned by PacifiCorp, which is the parent company of Utah’s largest electricity provider – Rocky Mountain Power. The Bonanza plant is in Uintah County. The small Sunnyside waste coal electric power plant is in Carbon County. RURAL COMMUNITIES Rural is often defined by what it is not – it is not metropolitan or urban. In the expanding West during the 1800s, most communities were rural. Many of these communities were geographically isolated, and out of necessity were somewhat self- sufficient. Small communities aggregated over time and became large cities, resulting in most of the West’s growth. Rural counties were integral to the development of these cities, providing agricultural Source: Utah AGRC and U.S. Energy Information Administration. goods and natural resources. However, the nature of Utah Foundation • utahfoundation.org Utah’s Coal Counties , Part III Research Report 3 agriculture and natural-resource extraction has changed, and the population of many rural communities has decreased. Agriculture and natural-resource extraction are still important to rural communities, but the future of many coal-related jobs is in peril. The nation’s rural, non-metro communities shrunk for the first time in history in 2011, and this trend has continued.3 In three states – Kansas, Nebraska, and North Dakota – more than 45% of each state’s counties have lost more than 10% of their population in the past 20 years.4 “Some of the biggest rural losses are in coal country,” with McDowell County, West Virginia seeing the largest decline – over 40% in the past 20 years.5 This is not the case in Utah. In the last 20 years, no Utah county has lost more than 10% of its population – a claim only 14 other states can make. In fact, Utah’s rural population has increased by nearly 50% in that time period.6 This growth is uneven, however, with some counties losing population or remaining the same. Coal County Population For years prior to 1970, the population of all of Utah’s coal counties were in decline except for Uintah. The 1970s saw tremendous growth in Utah’s coal counties – 51% compared to 38% statewide.7 This growth was due in part to the opening of two coal-fueled power plants in Emery County. Since then, however, growth in Utah’s coal communities has averaged about half of the state’s growth. While Kane, Sanpete, Sevier, and Uintah counties have grown robustly in the past 25 years, the populations in Carbon, Emery and Millard counties have remained stagnant. Figure 3: Population in Utah’s Coal Counties 40,000 35,000 Uintah 30,000 Sanpete Sevier 25,000 Carbon 20,000 Millard Emery 15,000 Kane 10,000 5,000 0 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2015 Source: U.S. Census Bureau, America Community Survey and “Population of States and Counties of the United States: 1790 – 1990.” Utah Foundation • utahfoundation.org Utah’s Coal Counties , Part III Research Report 4 UNCERTAIN FUTURE OF COAL-RELATED OPERATIONS In 2015, the Carbon coal-fueled electricity plant near Helper, Utah closed its doors. This small plant had 75 employees, though its owner, Rocky Mountain Power, estimates that there were at least three jobs in the community for every one job at the plant that supported plant operations. Carbon County Commissioner Jae Potter says that “a lot of people are leaving, and real estate prices are affected by mine closures in Emery [County] and plant closure here.”8 Even with this hit to the economy, the Carbon County’s Economic Development Director Tami Ursenbach notes that “many of the job losses at the Carbon Plant were absorbed by other power plants, attrition, and early retirement.”9 The Navajo Generating Station on the Navajo Indian Reservation is near Lake Powell on the Arizona side of the Utah-Arizona border. It is the largest plant west of the Missouri River.
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